By Vibhuti Sharma and Helen Coster
Revenue in its content licensing and distribution business fell 11.3 percent to $1.06 billion in the quarter.
Excluding certain items, the company earned $1.50 per share, below analysts' expectations of $1.52 per share.
The company pinned the blame on the timing of international licensing sales and several large domestic sales that occurred in the fourth quarter of 2017.
The New York-based company's results come nearly a month after former Chief Executive Officer Leslie Moonves, who led opposition of a merger, challenged the company's decision to deprive him of $120 million in severance pay after he resigned amid a wave of allegations of sexual assault and harassment.
While media majors Walt Disney Co and AT&T Inc are tapping into their extensive film and TV libraries to launch streaming rivals to Netflix Inc and Amazon.com Inc's Prime video, smaller players CBS and sister company Viacom Inc are focused on providing original content to other distributors.
In late January, CBS board members were briefed by bankers who presented various scenarios for the company that included mergers and options to remain independent, sources have said, who added that no decisions were made. The exact scenarios are not yet known.
The company is also moving ahead with looking for a permanent chief executive, these sources said.
On Feb. 11 CBS shareholders filed an amended complaint to their class-action lawsuit, alleging that Moonves and three other CBS executives inappropriately sold stock ahead of negative reports about Moonves.
In a statement CBS said: "The vast majority of sales mentioned in this complaint were made as part of pre-planned selling arrangements designed to comply with applicable securities laws. The remaining sales were subject to CBS' customary pre-clearance policies and procedures and were properly disclosed."
Both CBS and Viacom, controlled by National Amusements, are expected to rekindle merger talks in the coming months after attempts to combine the two fell apart last year.
CBS, home to popular shows such as the "Big Bang Theory," and "NCIS", said advertising revenue during the reported quarter rose 7.3 percent to $1.87 billion.
The company said affiliate and subscription fee revenue, which includes income from cable, satellite and streaming TV providers as well as its own All Access offering, rose to $1.03 billion from $923 million a year before.
Net income from continuing operations rose to $561 million, or $1.49 per share, in the quarter ended Dec. 31 from $40 million, or 10 cents per share, a year earlier.
The company recorded a $129 million charge related to the changes in the U.S. tax law last year.
CBS said total revenue rose 2.6 percent to $4.02 billion, below estimates of $4.13 billion, according to IBES data from Refinitiv.
(Reporting by Vibhuti Sharma in Bengaluru and Helen Coster in New York; Additional reporting by Kenneth Li in New York; Editing by Lisa Shumaker and Anil D'Silva)
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